Property Report: Tenants' rights when home is being sold

By Sandra Goodwin

A landlord trying to sell a rental property can't show prospective buyers through it just whenever they want.

Tenants have the right to quiet enjoyment of their property, so viewings must be at times mutually agreed.

The Residential Tenancies Act 1986 (RTA) covers the contractual relationship between a landlord and tenant.

By granting a tenancy agreement, the landlord has granted the tenant the legal right to occupy the premises and to have quiet enjoyment of them. They mustn't interfere with their reasonable peace, comfort and privacy while they're renting.

The Ministry of Business, Innovation and Employment says a landlord must tell a tenant in writing as soon as possible if they're putting premises on the market. They must also inform any prospective tenant if a rental is for sale.

A MBIE spokesperson says: "Landlords and their real estate agents have the right to show potential buyers through the house but the tenant must give permission first.

"Tenants can't unreasonably refuse access, but can set reasonable conditions such as limiting access to certain times of day and days of the week."

They can negotiate the frequency and duration of open homes or even decide not to agree to open homes or on-site auction, instead requesting the property be shown by appointment only. The tenant has the right to be present for any agreed open homes.

They can request a temporary rent reduction to offset the inconvenience of allowing open homes but don't have to be granted it. A tenant negotiating access times should tell their landlord (or their agent) why a time isn't suitable, such as times a shift worker is sleeping.

With the tenant's prior consent the landlord or their agent can also show through a registered valuer or a building expert preparing a building report. They don't have rights to bring cleaners in but may be able to negotiate this with tenants.

Ever noticed property sales website listings with hardly any interior photos? A landlord may take photos of their property for sale provided they don't interfere with the tenant's quiet enjoyment, including their right to reasonable privacy.

A MBIE spokesperson says: "The tenant can refuse to allow the landlord (or their real estate agent) to take and use photographs of their personal possessions. If this occurs, the tenant should work with their landlord or the marketing agent to organise for possessions to be temporarily moved in order to take photos."

Tenants' responsibility to keep the property reasonably clean and tidy at all times doesn't increase for marketing photos or open homes.

A landlord concerned about a property's cleanliness or tidiness should speak to the tenant but bear in mind that it's the tenant's home and they have the right to enjoy it. Landlords aren't allowed to interfere with the tenants' possessions to achieve show home-type photographs unless tenants permit them to.

The RTA defines a person acting for or on behalf of the landlord as an 'agent' and legally agents have the same rights and responsibilities as the landlords. The landlord may give them tenants' details and contact numbers to negotiate access directly.

The landlord needs to advise the tenants in writing once the rental has been sold, providing the new landlord's full name, contact details including address, plus the date the new owner will take over. If a bond is held by the Ministry of Business, Innovation & Employment, both the original and new landlords must fill in a change of landlord/agent form.

Normally a landlord must give 90 days' notice to end a periodic (open-ended) tenancy. But if they've sold unconditionally -- giving the purchaser vacant possession-- they need give tenants only 42 days' notice.

Neither the landlord nor tenant can arbitrarily elect to give notice to end a fixed-term (agreed start-and-end date) tenancy early just because the property has sold. The tenant can agree in writing to end the fixed-term early to enable the landlord to sell the property empty but isn't obliged to.

Otherwise the property is sold with the tenants in place with the buyer becoming the new landlord for the rest of the fixed-term. When a fixed-term tenancy property is sold neither party can end the agreement early just because they don't like the new landlord or tenant. (Slightly different rules apply under the RTA for mortgagee sales).

The MBIE recommends clear and open landlord-tenant communication to avoid issues during the sale of rentals.

- NZ Herald

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